The proposed work will analyze in depth the small and large-area geographic variations in both hospital and physician inpatient resource use. The specific aims of the project are to document the large differences in inpatient hospital and physician resource use across small areas and large regions with particular emphasis on what "doctors do in their workshops," in effect going behind the gross statistics on lengths of stay and cost per admission to reveal differences in practice styles for specific tracer conditions. The data base includes all Medicare Part A and B claims for hospitalized patients for 1982 or 1983 in four states: North Carolina, New Jersey, Michigan, and Washington. These claims, giving charges, have been transformed into costs of both hospital and physician care at the DRG level and below. The Part B physician claims provide exceptional detail on the kinds of procedures and treatment patterns across areas. Descriptive and multivariate analyses will (a) document inter-area variations in resource use, (b) differences by hospital type and specialty of attendings, (c) show the substitution of outpatient care for shorter hospital stays, (d) describe the basic differences in treatment patterns for specific tracers, (e) test the ancillary use differences in profit vs. nonprofit hospitals, and finally (f) explain the hospital-physician intensity differences as a function of physician availability and areawide admissions rates.